Oil inches above $74 a barrel as global inventories fall
Oil prices are rising again Tuesday, the third consecutive daily surge as investors tracked another hurricane menacing the US Gulf of Mexico just weeks after Ida hammered local production.
The international benchmark crude, Brent Prices is trading at 74.15 $/bbl in Tuesday’s early market sessions.
The latest weather system, Nicholas, has strengthened into a hurricane, bringing heavy rain and maximum sustained winds near 75 miles (121 kilometers) an hour, the National Hurricane Center said in its latest advisory. It’s expected to make landfall along the Texas coast in a few hours.
Analysts at Goldman Sachs also reported Tuesday that global crude inventories that ballooned during the pandemic have shrunk to the lowest level in 20 months as an economic rebound in top consumers China and the U.S. drive a robust recovery in fuel demand.
About 2.97 billion barrels of crude oil were stored onshore globally as of Sept. 5, the least since January 2020 before Covid-19 eviscerated demand, according to data analytics firm Kayrros.
U.S. stockpiles are at a two-year low, those in China are the smallest since September 2020, while inventories at the African hub of Saldanha Bay are at the lowest since April last year.
The storm Nicholas reached hurricane strength as it approaches landfall in Texas, bringing flooding rains to Houston and parts of Louisiana still recovering from Hurricane Ida’s blow two weeks ago. Nicholas was upgraded to a hurricane with winds reaching 75 miles per hour, the National Hurricane Center said in an 11 p.m. New York time advisory. The storm was located about 20 miles (32 kilometers) southeast of Matagorda, Texas, and was expected to reach landfall within hours.
U.S. Gulf Coast oil explorers had ~44% of their crude production shut two weeks after Hurricane Ida hit Louisiana, while Tropical Storm Nicholas approaches the coast of Texas, according to BSEE report.